Unlawfully Billed? Threaten To Report Them For Mail Fraud

One reader says that after Cingular overcharged her, she sent them a letter informing them they were committing mail fraud.

In response, Cingular’s executive offices called her and offered to refund her the overage, in addition to all the money she had ever paid them. “We want you to go away,” they said.

Mail fraud is defined as any unlawful attempt to get money in which the US Postal system is used at any point in committing the crime.

This is the first we’ve heard of this tactic, but it sounds intriguing. Employing it effectively would seem to involve:

1) being right about the unlawful billing
2) letting the company know you’re going to report them
3) giving them a chance to respond favorably
4) filing complaints with the USPS and your local DA’s office

There has to be a difference between pointing out someone’s unlawful conduct and extortion, and the California Code can’t be that blanket-y about labeling “hey, you’re breaking the law” as extortion. (That said, I’m not a lawyer etc etc, and I don’t live in California, but I would not hesitate to use this line of response if I did live in California and I had a good faith expectation of being correct.)

This is a pretty interesting tack this woman took, and one that should have been obvious… especially after reading “The Firm.”

Yes, I’d say that the woman who notified them of the problem was just pointing out that it was wrong and that wrong constitutes mail fraud, and that is something that is taken more seriously.
However, as InThrees: pointed out, pointing out something is wrong and that it needs to be corrected is not a threat of a criminal complaint itself. Now, if she offered the two explicit choices, that would fall under the extortion part. But I think that stating something is wrong and that it could technically be illegal/fraudulent is not in any way threatening, but more of a reminder of different points of view.

To add, I think it is a fine line.
@Crazytree: I think you have it right–an explicit demand is easily extortion, and an notification, possibly even listing the penalties would not be. To note–it usually takes a lot to define a threat–it usually must be pretty explicit.

Has anyone tried this with the RIAA and their new extortion tactics? For example, they’ve certainly sued plenty of people whom have never stolen music, some who have never even used a computer! Perhaps this kind of defense might keep the innocent safe from the RIAA’s new extortion tactics.

Umm.. the Riverdance Rapist case involved a woman threatening to charge someone with rape and cause undue harm to a very public career if money wasn’t paid. It also involved an actual law suit being filed and the “distortion” part entering in the equation as an argument for a counter suit.

That’s significantly different than informing a company they are guilty of mail fraud, and you will file a complaint if it continues.

OK I have a serious question relevant to this topic. And it pertains to everyone’s favorite punching bag, Time Warner. And in this case it’s the best of the best — Time Warner of Southern California.

These clowns have overcharged me 3 months in a row for my high-speed internet service (thankfully, the internet service has been fine — however the billing system and the CUSTOMER service suck).

Each month, I call and they claim “oh that’s not right, I don’t know why it went up by $10….” and then claim they’ll credit my account. And don’t. It’s like there’s no accountability, no traceability, no paper trail, no record of these discussions?!?!?

So…. assuming I receive my bill via mail and can demonstrate the regular overbilling with my monthly statements… can I ask them to look into this, because I believe the overbilling constitutes mail fraud?

the underlying illegal conduct is EXTORTION and is therefore an exception to anti-SLAPP.

whether or not Flatley committed the rape is 100% IRRELEVANT as is whether or not Cingular is actually committing mail fraud. there was no determination made as to whether Flatley actually committed the rape, and even if he did and it was on videotape with a signed confession, threatening to file a criminal complaint unless he pays you $1,000,000 is criminal extortion according to the California Supreme Court.

SLAPP is irrelevant and inapplicable to Cingular’s billing practices, but is on point with the customer’s supposed “claim for redress”.

Hey, isn’t this how Tom Cruise nailed his crooked law firm in the Movie “The Firm”? Excess billing = mail fraud. Didn’t make Ed Harris happy, but he did manage to get David Strathairn out of the Federal Pen

@vincedotcom: I don’t think you having wrestling drunks for a living qualifies you to comment on the legality of a complex legal issue such as the Flatley v. Muoro decsions and then talk down to me about it based on your mistaken interpretation.

I work with these issues, have researched them, worked with them and I advise clients on this area of law on a semi-regular basis. This decision has had huge ramifications on the Plaintiff’s Bar.

While the liklihood of being held accountable for threatening Cingular for a few bucks is very low, the fact of the matter is that these types of threats are noncompliant with Flatley and I would advise my clients against these types of threats for the aforementioned reasons, as well as a *potential* countersuit for malicious prosecution and abuse of process. Then come the SLAPPs and the SLAPP-backs and motions for attorney fees, etc.

Scenario One, the Cingular bill: The woman in the story as reported by Consumerist receives an erroneous billing in the mail from Cingular. She tells Cingular that she believes them to be guilty of mail fraud. Consumerist does not say whether or not she threatened to report them. As reported, there is no consideration — the consumer did not request Cingular to do anything, so far as we know.

Scenario Two, Flatley v. Mauro: Mauro tells Flatley that if Flatley does not settle with Mauro’s client to the tune of seven figures, Mauro’s client will report him for sexual assault. This is quite correctly extortion.

Scenario Three, Consumerist’s four-step tactic:

“1) being right about the unlawful billing 2) letting the company know you’re going to report them 3) giving them a chance to respond favorably 4) filing complaints with the USPS and your local DA’s office”

What you seem to be objecting to is points two and three — letting the company know and giving them a chance to respond favorably.

If a California consumer of Cingular told Cingular that she believed they were guilty of wire/mail fraud and she was going to report them unless they gave her something of material value is quite likely extortion.

Conversely, if a California consumer of Cingular told Cingular that she believed they were guilty of wire/mail fraug and she was going to report them unless they stopped is quite likely not extortion, as she is not demanding anything material. If there is an argument to be made that anyone is guilty of extortion here, it would be Cingular trying to extort money out of the consumer — i.e., give us money or we will take you to court for failure to pay your bill.

If your take on Mauro were correct, an extortion victim could never even tell the extorter to stop, as that action would in and of itself also be extortion.

Hey they can’t claim blackmail if they voluntarily offered that money WITHOUT COERCION. Now when you accept that money you will get them to sign a note saying “Cingular Wireless, part of AT&T, has offered (insert client’s name here) a refund in the amount of $(insert amount) knowingly, willingly, voluntarily and without any coercion from (client’s name) whatsoever, and Cingular willingly and voluntarily surrenders all of its rights to sue or otherwise take any legal action on this transaction.”

It’s not blackmail if Cingular offered the money so that the customer would “go away” and if the customer did not demand that they return all monies paid to Cingular. As far as I know, the customer only asked that they reverse the erroneous charges on their bill.

When I used to do collections, I talked to a handful of people who tried this threat. We usually told them to go ahead and try it (Being the A-holes we were). The Legal department never asked us about any issues like this, so I doubt that any of them ever followed through.

> @Crazytree: It’s only extortion if you make a
> demand. If she just called them on it and they
> made an offer, then she didn’t extort anyone.

The company’s reaction makes me thing there’s more that meets the eye. I wonder if a class action lawyer might be interested in “purchasing” her case for more than “all the money she had ever paid” the company.

@DocRaf: An amusing quote seeing as it came from an e-lawyer! Here’s a tip for everyone: When commenting pretty much anonymously on a blog, you have no real credentials to back up anything you ever say.

Has Cingular violated any fraud statutes? Not provably, but many people believe that Cingular and other companies systematically mis-bill people hoping they don’t notice and just overpay or that fighting with the company to make it right is not worth the effort. It’s a pattern of activity and it’s intentional. It’s fraud.

Now if only we could prove what we all already know…

Hey Ben, maybe it’s time to get a C-level mole in a major wireless company to find out the truth about overbilling people!

@Crazytree: Here’s the part I don’t get about your position on this. Wouldn’t it be:

“I think you’re committing mail fraud, and that’s criminal. Now that you know, if you don’t stop harming me by committing an illegal act to my detriment, I’ll report it.” = not extortion.

“I think you’re committing mail fraud, and that’s criminal. If you don’t give me a bajillion dollars, and also a shrubbery, I will report it.” = extortion.

My point: Is it really extortion if your demand is only that the other party stop performing the act that you claim and interpret as criminal? It seems like telling a party to stop actively harming you in a criminal manner, or else you’ll report them is a far cry from telling a party that you’d like to be enriched by them, or else you’ll report them.

Assuming the mistake was actually in cingular’s fault, once they refuse to correct the mistake and continue trying to collect the money, is when it should probablky start actually counting as mail fraud. Alot of asusmptions there though.

Ummm… I’m not a lawyer, but wouldn’t the company have to knowingly and willfully demand money it was not entitled to for this to be mail fraud? If they really and truly feel they are owed that money, and have a billing structure in place that can support their claim, how could it be mail fraud? That’s not to say they’re right, just that it was an error and not fraud.
My issue with this is that threatening legal action where not appropriate is it is a waste of judicial resources and demeans legitimate cases involving the charge.

Cingular would be guilty of fraud if they had a billing practice of overcharging. Like many issues with the Law, you would have to know if there was any intent to purposely overcharge, which would require inside information from a Cingular employee. I dont think the customer can be guilty of extortion because she does not control the criminal prosecution, the USPS Police would make that decision.

You might be a very successful, well paid lawyer, but I have a feeling your paralegals do all the real work. You know, that stuff between the client meetings and the court appearances?

Now, I admit it’s been over ten years since I was a paralegal, but I still remember a couple of things you seem to be forgetting.

First, for a precedent to be binding it has to match the case before the court in ALL key facts. Since INTENT is a necessary element of extortion, and the case found that the alleged victim was guilty of extortion, I can assume the blackmailer had INTENT TO EXTORT. That’s a key fact that would have to be proven in this case for your analysis to be valid.

Second, you speak as if a single precedent fully defines any area of law. Precedents are altered, modified and clarified by later case law. Even IF this lady were found guilty based on your precedent, that’s nothing but an opportunity for a later court to clarify the precedent upon her appeal.

Lastly (and this is more of a criticism of your attitude than your argument) in your present field of law, you may very well be giving your clients the safest advise to avoid this sort of threat. But, if one of your clients had gone ahead and done so, would you throw up your hands and say “shouldn’t oughta done that?”

A lawyer’s job isn’t JUST to advise about the law, it’s sometimes also to challenge the law, or at least an unjust application of the law. Us laypeople kind of count on you guys to do that for us.

A little more thinking outside the box and a little less quoting the lawbooks might have been more appropriate here, is all I’m saying.:-)

Info. about what constitutes mail fraud and the actual statutes are cleverly concealed on the Internet. The USPS has great info. on this as well as pretty clear examples (e.g. invitations to phony work-at-home schemes and the like).

Crazytree – you may be right about extortion being illegal, but it doesn’t at all apply here. All she said was that they were commiting mail fraud. Telling someone that they are commiting a crime and you aren’t falling for it is not illegal.

I suppose if someone now writes their celluar company with the hope that they will refund them all the money they’ve ever paid *that* will be extorting.

I dont see how notifying someone of intent to file criminal charges or suit if they dont stop wrong doing would be extortion. Heck, say someone owes me money. Even if I say “Pay me my money, or Ill sue” I can’t see that being extortion.

Somehow I don’t believe that this is mail fraud, regardless of the argument that appears to be ongoing on what the statutes of California are.

It’s a billing error, which happens. The customer pointed out the error and I am sure in the way she did she just got on someone’s bad side who decided to end her contract with Cingular. There is an overwhelming lack of information or clarity on the issue which opens much speculation (but just speculation)

By the way, for everyone who’s weighed in on the matter, there’s an overwhelming problem with your arguments concerning California. You’re all right, and all wrong. Go argue the case in front of a judge and use up the entire appeal process and THEN you can prove your point. Until then it’s an interpretation (as is everything these days) and can be argued until you are all dead or bored.

Please don’t encourage people to accuse others of crimes they didn’t commit. Overcharging somebody isn’t fraud if it’s unintentional and if they take reasonable measures to prevent incorrect charging. Crazytree is right, guys. . .

Now if Cingular actually committed fraud, and there is proof (just make sure you know what “fraud” actually means according to the law — it’s often not the same as the Webster’s def.), then go right ahead and let them know that you’re going to report them. Otherwise, if you carelessly throw around accusations against somebody, lookout for civil (libel) and criminal (extortion) charges against *you*.

There are reasons why people have to study the law for at least three years and pass an exam to become a lawyer.